As the global memory shortage gets worse, Nintendo has seemingly started facing the heat. According to Bloomberg’s Takashi Mochizuki, the company has been facing pressure from investors to raise the price of the Switch 2. The report notes that, if such an announcement happens, it will likely be later this week during the company’s earnings report.
The pressure is seemingly due to the ever-increasing costs of manufacturing Nintendo Switch 2 consoles, which have, in turn, eaten into the company’s profit margins. “Many now believe that Nintendo simply must raise prices when it reports earnings this Friday, to guard against escalating costs and appease an anxious investor community,” notes the report.
Aside from hardware, however, Nintendo has been seeing a few successes in recent times with projects like Pokémon Pokopia and The Super Mario Galaxy Movie. Despite this, however, investors are seemingly “concerned” about the profitability of keeping the Nintendo Switch 2 at its current $450 price tag. Things will likely end up worse as more of the world’s memory supply is bought up, alongside other disruptions due to geopolitical situations.
Toyo Research Advice analyst Hideki Yasuda noted that stock prices are falling due to the market “punishing” stocks that “lack inflation-hedging power.” On the other hand, Michael Pachter of Wedbush Securities believes that “they would be foolish to raise prices.”
“The consumer is hurting — people are paying more for gasoline and food, and when prices go up, entertainment budgets are one of the first things to go.”
If a price hike for the Nintendo Switch 2 is announced, it’s believed to be either $50 or $100. Yasuda, however, believes that such a minor hike is unlikely to make the console profitable. Rather, it will likely be perceived as being less of a burden.
Equity analyst Pelham Smithers noted that a major price hike this early in the console’s life cycle will have major negative effects on software sales moving forward. “If they make a mistake on pricing, whichever way it goes, we run into the Wii U problem — the situation will just get worse and worse,” he said.
Questions about Nintendo potentially raising the price of its new console have been popping up ever since the company first unveiled it last year. Back in February, another report noted that Sony and Nintendo have both been paying close attention to RAM prices.
“People familiar with the company’s thinking” had indicated that the state of memory prices will have a major role to play in Sony’s next-generation console aspirations. Similarly, Nintendo was noted to be discussing raising the price of the Switch 2.
Nintendo president Shuntaro Furukawa had said similar things about keeping an eye on memory prices and tariffs in an interview back in January.
“Hardware profitability depends on factors like component procurement conditions, cost reductions through mass production, and the impact of exchange rates and tariffs,” Furukawa said. “It’s difficult to generalize. Fundamentally, we aim to address this by advancing component procurement over the medium to long term.”
“We procure from suppliers based on our medium- to long-term business plans, but the current memory market is very volatile,” he continued, discussing memory shortages. “There is no immediate impact on earnings, but it is something we must monitor closely.”
